Home Values vs. Property Tax Rates

Home Values vs. Property Tax Rates

Around this time of year, lots of questions are brought to my attention about property taxes. In Oregon, our tax year runs from July 1st to June 30th of the following year. October brings the certified amounts and the tax bills are mailed out and homeowner’s need to pay their bill by November 15th. Over the past couple of years, the question I hear over and over again is “My property values have gone down but my property taxes keep going up, how is that possible?”

Measure 47 was passed into law in Oregon in 1996, which limits the annual property tax increase to 3% and homeowner’s pay based on the lesser of AV – Assessed Value – or RMV – Real Market Value. In a snapshot, the AV increases at 3% per year and has been since 1996 while the RMV fluctuates with the real estate market.

So in 2007, when the market value was at its peak, the RMV was really high, homeowner’s were happy to pay on the AV instead. The AV has been steadily increasing every year, so as the property values decreased by $25k, $50k, $100k etc… the AV has increased and the two figures are fairly close together now. Thus even though the RMV has gone down, property taxes have remained steady since the lower of the two numbers has not significantly changed.

Therefore, in the state of Oregon, if you can show that your home’s RMV is below your home’s AV then you can contact your county and discuss your case for lower tax returns. Measure 47 protects homeowner’s rights to pay taxes on whichever of the two property values is lower. If you believe that your taxes are being calculated incorrectly, contact your county property tax office. Each county in Oregon has a specific process for appealing so make sure you do your research and follow the counties process diligently.